After half century, gasoline pipeline 'just keeps on rolling'

Oct. 14, 2012

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Green Bay Press-Gazette

A construction worker prepares to lower the 10-inch-wide pipeline into the ground during its 1961 construction. / Photos from Press-Gazette Collection of the Nevill

Update

It could take months before a cause is determined for the pipeline failure that occurred July 17 north of Milwaukee, according to DNR officials. Investigators have found that the pipeline was operating at maximum pressure when it sustained a rupture one inch wide and 107 inches long. But officials have not pinned down why the pipeline cracked.

About this report

Reporter Scott Cooper Williams conducted more than two-dozen interviews over several weeks to get a comprehensive picture of the pipeline system that brings millions of gallons of gasoline to Northeastern Wisconsin every day. He reviewed public records from state and federal regulatory agencies, researched the history of the pipeline, pieced together complex ownership changes and spoke with industry insiders about how the energy industry works.

On the Net

To read the federal government’s 1988 pipeline safety alert and other documents gathered for this report, go to www.greenbaypressgazette.com.

Crews work on installing the West Shore pipeline, which sits just three to four feet underground in some locations. / Press-Gazette Collection of the Neville Public Mus

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In the spring of 1961, Green Bay residents followed news of a popular new president in Washington, an emerging space race with Russia, and a budding football dynasty here at home under a coach named Vince Lombardi.

Garnering little attention, by comparison, was construction of a new underground pipeline to transport gasoline and other petroleum products from Chicago to Green Bay. On April 15, 1961, the Green Bay Press-Gazette reported that crews were installing the pipeline and that it would be working later in the year.

“The best available pipe and other material, all new, will go into the system,” the newspaper said.

For most of the 50 years that followed, the West Shore pipeline operated in obscurity, quietly delivering fuel for motorists not only in Green Bay but throughout Northeastern Wisconsin and beyond. Early projections that the 10-inch-wide pipeline could carry 3 million gallons a day were met, surpassed and doubled — and then doubled again.

“That thing was constantly running,” said Maurice Valentine, a manager during the 1990s for Amoco Oil, one of several firms to operate terminals in Green Bay, on the receiving end of the pipeline.

“Winter, summer — it didn’t make any difference, because the pipeline just keeps on rolling,” Valentine said. “That was probably as dependable a pipeline as you could find.”

But something went wrong on the morning of July 17.

In a suburban area outside Milwaukee, pipeline operator Buckeye Pipe Line detected signs of a leak. A sudden drop in pressure was followed by a corresponding surge in flow. More than 50,000 gallons spilled. To prevent the leak from getting worse, Buckeye crews slammed shut the valves downstream and upstream from the leak site.

The West Shore pipeline was out service, and would remain so for four days, cutting off gasoline supplies in Northeastern Wisconsin. Pump prices jumped 10 cents a gallon in Green Bay, and Gov. Scott Walker declared an emergency that allowed trucking companies to take extreme measures in seeking out new sources.

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Investigators later determined that something had caused the pipeline to rupture, with a nearly 9-foot-long crack found along the steel artery in the Washington County town of Jackson. No cause for the rupture has been determined yet.

Industry insiders and government regulators say the West Shore pipeline had a solid record for safety and reliability prior to the incident. Although there had been previous instances of leaks and other problems, those incidents have been seen as relatively few and minor, according to regulators.

Ted Amman, spill coordinator for the state Department of Natural Resources, said his agency has documented 25 incidents on the West Shore pipeline since the 1970s. But while some were more significant, many were caused by such minor mishaps as homeowners striking the pipeline while digging in their backyards, Amman said.

“That’s not indicative of a major consistent problem,” he said.

Buckeye Pipe Line and others involved in the Chicago-to-Green Bay operation will not discuss details of steps taken to maintain the pipeline and comply with regulatory mandates, including a 1988 warning from a federal pipeline safety agency. But Buckeye officials say there was never an indication of the sort of rupture and leak that occurred July 17.

“Obviously we had no warning signs,” Buckeye safety director Patrick Hodgins said. “If we had, we would’ve done something to keep this from happening.”

Big investments

Before the West Shore pipeline was built, gasoline arrived in Green Bay mostly on barges. Because harsh winter conditions made icy waterways impassable, large tank farms were established to store a winter’s supply of product on the city’s industrial north side.

But a group of oil companies in 1961 decided that it would be more efficient to pipe gasoline and other petroleum products directly from refineries in the Chicago area. Positioned just three to four feet underground in some locations, the pipeline extends through De Pere and Bellevue before reaching Green Bay’s east side and crossing the Fox River beneath the water’s surface. According to Press-Gazette reports at the time, the construction project cost between $19 million and $22 million.

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In 1998, West Shore merged with Badger Pipeline and acquired a new pipeline network extending from Chicago to Rockford, Ill., and then north to Madison.

According to state regulators, it is one of only two pipeline systems transporting petroleum products to Wisconsin, along with Canadian-owned Enbridge Inc., whose system extends generally from Chicago to Superior.

West Shore Pipe Line Co. has attracted a rotating cast of investors over the years and today is owned by a group that, according to the Federal Energy Regulatory Commission, includes Buckeye and companies either created by or associated with Exxon, Mobil, Shell, Sunoco and Citgo. Pennsylvania-based Buckeye owns the largest share, 34 percent, and has been the pipeline’s operator since 2009. Prior operators included Citgo, which owns a refinery near Chicago, and Amoco, which has since been acquired by BP, formerly known as British Petroleum.

Sunoco spokesman Thomas Golembeski said it is not unusual to see oil industry competitors forge alliances for such endeavors as pipelines, in deals frequently worth several million dollars.

Through an affiliate spun off from the main company, Sunoco paid $4 million in 2003 to increase its stake in West Shore from about 9 percent to 12 percent. Later, the company spent another $7 million to boost its interest in the pipeline to 17 percent.

Noting that Sunoco currently has no retail outlets in Wisconsin or Illinois, Golembeski said the pipeline has strategic importance to the company nonetheless.

“We view it as a valuable resource,” he said. “Otherwise we wouldn’t invest in it.”

The product

According to disclosures to federal regulators, West Shore Pipe Line Co. last year reported carrying 154 million barrels of product. At 42 gallons per barrel, that’s 6.4 billion gallons, or an average of nearly 18 million gallons a day.

The company reported yearly earnings of $18.4 million on revenues of $60 million. The report valued West Shore property at $88 million, although the size of Sunoco’s most recent investment suggests the pipeline company could be worth much more.

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Known as a common carrier pipeline, the West Shore pipeline — apparently named for its location along the western shore of Lake Michigan — transports products owned by other companies. Depending what is in demand, it can switch from gasoline to diesel or other products, timing its deliveries precisely so as to minimize waste and reach the market at the right time. The pipeline is controlled remotely from Buckeye facilities in Pennsylvania and in Wisconsin. The company maintains a station in Green Bay at 2119 N. Quincy Ave.

On the receiving end, customers such as those operating terminals in Green Bay must be ready to accept their orders with the same precision. Deliveries are scheduled down to the minute. Once product has arrived and is stored in tanks, truckers line up to fill their rigs and haul the fuel to gas stations, convenience stores or other customers.

Greg Klimek, president of Klemm Tank Lines, which has a fleet of 60 trucks in the Green Bay area, said he doubts many people realize the size of the operation that distributes petroleum products from the large white storage tanks along Interstate 43 on Green Bay’s north side. The system provides gasoline to retailers throughout northern Wisconsin and occasionally out of state, Klimek said.

“People would be amazed at the amount of produce that comes in,” he said. “It’s just simply amazing.”

An aging system

The system does not always operate without problems.

In 1986, employees accidentally left open a valve during a delivery to Green Bay and allowed more than 200,000 gallons of gasoline to spill into nearby ditches. A faulty tank gauge failed to trigger an alarm. West Shore officials later assured the DNR that the cleanup was a success and that the incident was the first of its kind since the pipeline opened in 1961.

“This is an extremely good record,” a company official wrote in a letter to the DNR shortly after the incident, “and there is no reason to believe that this record of safe operation will not continue in the future.”

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Similar incidents of valve failures in 2006 and 2009 allowed about 100 gallons to spill each time in the Milwaukee area, DNR records show.

In 2004, Dane County officials inspecting a Madison tank farm found underground contamination on West Shore’s property. The problem had reached groundwater supplies, and a cleanup plan required West Shore to perform soil borings, which pumps air underground to extract hazardous vapors from the contaminated soil.

Wendell Wojner, a project manager for the DNR, said some companies try to escape responsibility in those situations. But West Shore cooperated with the state for several years to fix the problem, Wojner said.

“I’m thankful that they’re active and involved and willing to do something,” he said.

Hodgins, the safety director for Buckeye, declined to comment on either incident because both occurred before Buckeye took over as operator of the pipeline. A spokesman for predecessor Citgo also declined to comment, saying all records related to the pipeline were turned over to Buckeye in the transition.

The federal agency investigating this summer’s breakdown near Milwaukee — the Pipeline and Hazardous Materials Safety Administration — noted in records of the incident that the federal government in 1988 warned of problems on pipelines similar to West Shore’s. The warning stated that several pipelines had failed from corrosion or other problems. The government recommended that pipeline operators “re-evaluate the potential for safety problems” and “carefully review their leak, failure and test history.”

West Shore tested its pipeline in 1990 and during the test, “one failure occurred due to a crack,” records show.

Hodgins declined to comment except to say that the pipeline is operated and maintained in strict compliance with all federal rules.

The age of Wisconsin’s pipeline, now more than 50 years old, is not cause for concern, Hodgins said. He said he has worked with much older infrastructure in the energy industry.

“That’s not considered old at all,” he said. “The maintenance of the pipe — that’s what’s important.”

Amman, the DNR spill coordinator, agreed that the West Shore pipeline has been well operated and maintained. But he differed on whether a pipeline’s age is insignificant.

“This is an infrastructure that’s aging,” he said. “It’s like your car: You’re going to have more problems when it’s 15 years old than when it’s 10.”